Assignment: Your Financial Statements

Business Plan Development

Task: Build the three financial statements for your restaurant business plan.

1. Write your assumptions

• Seats, days open, covers per day (lunch and dinner) and average cheque.
• Food and beverage cost percentages.
• Staffing plan and hourly rates, including payroll taxes and benefits.
• Rent, utilities and other fixed costs.
• Loan amount, interest rate and term; owner investment.

2. Projected income statement

• Monthly for year 1, yearly for years 2 and 3.
• Show every line as a percentage of sales, and calculate prime cost.
• Compare your percentages with the benchmarks in the Income Statement lesson and explain any big difference.

3. Opening and year-end balance sheets

• List what you will own on opening day (equipment, renovations, inventory, deposits, cash) and how it is financed (loans, owner’s investment).
• Check that assets equal liabilities plus equity.

4. Monthly cash flow projection for year 1

• Start with your opening cash and show receipts and payments in the month they occur.
• Identify your lowest cash month and how you will cover it.

5. Reflect

In a short paragraph, explain what the three statements tell you about your concept: Is it profitable? When does it become cash-positive? How much reserve do you need? Keep your work — you will use it in the Funding and Break-Even sections that follow.